The Commercial Tenancy Relief Scheme has been reintroduced by the Victorian Government to alleviate the financial hardship faced by tenants and landlords as a result of the COVID-19 pandemic.
The Scheme will be available to businesses with an annual turnover of less than $50 million that have suffered a decline in turnover of at least 30% due to COVID-19.
Key Features and eligibility:
Must be eligible tenant as at 28 July 2021 which is a SME entity that operates a business in Australia and satisfies fall in turnover test. And is not excluded tenant.
An SME entity is small to medium enterprise with annual turnover of less than $50m.
An excluded tenant includes tenants who use premises wholly or predominantly for a farming or agricultural activity.
Must have had 30 per cent reduction in turnover because of coronavirus.
Fall in turnover will be calculated by comparing pre-pandemic 2019 turnover to recent turnover. Tenants can compare their turnover from any three consecutive months between 1 April and 30 September 2021 to their turnover in the same three months in 2019.
Must follow the process under the scheme for requesting rent relief from their landlord.
Commercial landlords are required to give their tenant rent relief that:
is in proportion to their tenant’s fall in turnover because of coronavirus
is made up of a minimum 50 per cent rent waiver (the remainder can be made up of a rent deferral).
There will be a freeze on rent increases until 15 January 2022.
Tenants and landlords can access free mediation through the Victorian Small Business Commission (VSBC) to resolve disputes over rent relief and other disputes under the Scheme.
Small business tenants seeking rent relief will need to make a written request to their landlord with evidence of their eligibility. A tenant must provide evidence to show fall in turnover from accounting records.
The Scheme is in operation from 28 July 2021 to 15 January 2022.
The Scheme is retrospective back to the date of its announcement of 28 July 2021. A tenant can make a request for rent relief back to that date, as long as they submit their application to their landlord and provide the necessary evidence on or before 30 September 2021. If the tenant applies after 30 September 2021, the rent relief period starts from the date they apply to their landlord.
The Commercial Landlord Hardship Fund 3 provides grants to eligible small landlords who experience hardship as a result of waiving rent for their tenant(s) between 28 July 2021 and 15 January 2022 under the Commercial Tenancy Relief Scheme.
Key Features and eligibility:
Eligible small landlords can apply for a grant of up to $6000 per eligible tenancy.
In cases where landlords are experiencing acute hardship because of the rent waiver agreed with their tenant(s), the grant may be increased to a maximum of $10,000 per eligible tenancy.
Eligible small landlords and their tenants must have agreed a rent waiver or non-payment of at least 50 per cent of the agreed rent relief provided between 28 July 2021 and 15 January 2022 under the Commercial Tenancy Relief Scheme.
Only rent waivers will be considered for a grant from this fund. A waiver is non-payment of rent.
A small landlord can make one application for each tenancy eligible under the Commercial Tenancy Relief Scheme if their total taxable landholdings are under $3 million, excluding their primary place of residence.
To be considered for acute hardship and apply for a grant of up to $10,000, landlords must have waived more than $6000 in rent between 28 July 2021 and 15 January 2022 and submit a Qualified agent letter(DOCX 58.62 KB)
Landlords must attest that commercial rent represents more than 50 per cent of their total gross income for the 2019-20 financial year.
Be able to confirm property ownership by Customer Number shown on the State Revenue Office Land Tax Assessment Notice or by a 2020-21 Municipal Rates Notice